Sterlingov Arrested for Operating Bitcoin Fog on the Dark Web – | #Bitcoin | #BtitcoingSecurity | #BitcoinHacking


Bitcoin Fog operator is arrested for money laundering and other charges.


Russian-Swedish national Roman Sterlingov, 32, has been arrested at Los Angeles International Airport and charged with allegedly operating the longest-running bitcoin money laundering service, Bitcoin Fog, on the darknet.  He ran the service since 2011 and was charged with “money laundering, operating an unlicensed money transmitting business, and money transmission without a license in the District of Columbia.”

According to court documents, “Bitcoin Fog was the longest-running cryptocurrency mixer, gaining notoriety as a go-to money laundering service for criminals seeking to hide their illicit proceeds from law enforcement.”  The complaint reads, “Mr. Sterlingov founded Bitcoin fog in 2011 under the pseudonym Akemashite Omedetou, who advertised on BitcoinTalk that his service [mixes] up your bitcoins in our own pool with other users and can eliminate any chance of finding your payments and making it impossible to prove any connection between a deposit and a withdraw inside our service.”

Photo by Soumil Kumar from Pexels

Authorities contend the service moved over 1.2 million Bitcoin (worth approximately $335 million), most of which came from darknet markets tied to “illegal narcotics, computer fraud, abuse activities, and identity theft.”  There are many underground products and services that sell illegally in cyberspace and the Department of Justice (DOJ) is constantly scanning for and shutting down these sites.  The IRS-CI District of Columbia Cyber Crime Unit and the FBI Washington Field Office are specifically investigating this case.

Special agent Devon Beckett said, “Analysis of bitcoin transactions, financial records, Internet service provider records, email records, and additional investigative information, identifies Roman Sterlingov as the principal operator of Bitcoin Fog.  While the identity of a Bitcoin address owner is generally anonymous (unless the owner opts to make the information publicly available), law enforcement can often identify the owner of a particular Bitcoin address by analyzing the blockchain.”

Chainalysis co-founder Jonathan Levin added, “This is yet another example of how investigators with the right tools can leverage the transparency of cryptocurrency to follow the flow of illicit funds.”

Bitcoin has gained in popularity in recent years.  It was slow to gain traction, but since its inception more than a decade ago many contenders have entered the market with more than 1500 cryptocurrencies now being traded on exchanges.

“Arguably the biggest failings for Bitcoin, and other cryptocurrencies over the previous years, lies with security,” said Chakib Bouda, CTO at Rambus, referring to the billions of dollars’ worth of Bitcoin and other cryptocurrencies that have been stolen from exchanges by hackers.  And, unfortunately, there are some, like Sterlingov, looking to operate below the radar on the darknet, making it difficult for security efforts to keep pace.

However, Bouda added, “We expect in ten years’ time, Bitcoin will become mainstream and have a remarkably different reputation.”

Ripple’s CTO David Schwartz agrees, saying, “The next decade will bring an explosion of low-cost, high-speed payments that will transform value exchange the way the Internet transformed information exchange.”  Ripple is a real-time gross settlement system, currency exchange and remittance network created by Ripple Labs Inc.

Sources:

Individual Arrested and Charged with Operating Notorious Darknet Cryptocurrency “Mixer”

ROMAN “BITCOIN FOG” STERLINGOV ARRESTED FOR LAUNDERING $336 MILLION

What Will Happen to Bitcoin in the Next Decade?



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